By COMFORT OGBONNA
HONG KONG — Fast-fashion retailer Shein’s planned Hong Kong initial public offering has been fully covered by investor demand, according to two people familiar with the matter, bringing the company closer to a long-awaited stock market debut despite growing regulatory scrutiny and challenges in some of its biggest markets.
Shein launched the share offering Monday, seeking to raise as much as $1.8 billion and valuing the company at up to $27 billion. Strong demand for the shares could provide a boost to the Singapore-based company as it seeks to make its public-market debut after several previous attempts were complicated by political, regulatory and investor concerns.
Investor orders have come from a mix of existing shareholders, China-focused investment funds and multi-strategy funds, according to the people familiar with the offering. They requested anonymity because they were not authorized to discuss the transaction publicly.
Shein is offering 280 million shares at between 47.60 Hong Kong dollars and 49.50 Hong Kong dollars per share. At the top of that range, the offering would raise approximately $1.8 billion.
The final offer price is expected to be announced Monday, with the company’s shares scheduled to begin trading on the Hong Kong Stock Exchange on Sept. 1, according to its filings.
The planned listing represents a major milestone for Shein, which has spent years seeking a path to the public markets. The company was founded in China and is now headquartered in Singapore, with its global business built around an online model that offers inexpensive clothing and accessories to consumers in markets around the world.
Shein’s products, including dresses priced around $5 and jeans costing about $10, have helped it become one of the world’s most prominent fast-fashion retailers. The company sells to customers in roughly 160 countries and has built a large online following by rapidly producing new styles at low prices.
However, its planned IPO comes at a significantly lower valuation than the company commanded during the private-market boom of 2022. The Hong Kong offering values Shein at as much as $27 billion, nearly 70% below the approximately $100 billion valuation it reached four years ago.
That decline reflects a more difficult environment for technology and consumer companies as well as increasing questions about Shein’s growth prospects.
The United States and Europe remain key markets for the retailer, but competition, regulatory changes and shifting consumer behavior could make it more difficult for the company to maintain the rapid expansion that helped fuel its earlier valuation.
Shein has also faced persistent scrutiny over environmental, labor and corporate-governance issues.
Regulators in several countries have investigated the company’s business practices, while previous investigations have resulted in financial penalties. Authorities in France fined the company over alleged issues involving discount practices, while Italian regulators took action over allegations related to environmental claims.
Environmental groups and regulators have increasingly focused on the fast-fashion industry because of concerns about waste, manufacturing practices and the environmental impact of producing and shipping large volumes of inexpensive clothing.
Shein has also faced scrutiny over its supply chain and labor practices, issues that have complicated its efforts to obtain a major stock market listing.
The company has attempted to pursue listings in both New York and London over the past several years but encountered political opposition and investor concerns surrounding its environmental, labor and governance record.
The Hong Kong listing offers Shein another route to the public markets at a time when the company is seeking to demonstrate that it can meet the demands of regulators and public-market investors.
The company is also facing regulatory investigations in Europe and the United States, adding another layer of uncertainty for investors assessing its long-term prospects.
Despite those challenges, the strong early demand for the IPO suggests that investors remain interested in Shein’s global customer base, low-cost business model and potential for continued expansion.
A successful listing could give the company additional access to capital and increase its visibility among international investors. It would also provide a public valuation that could be closely watched by investors and competitors across the global retail industry.
Shein has maintained that it is committed to strong corporate governance and greater transparency as it prepares for life as a publicly traded company.
The company said it maintains high standards of corporate governance, transparency and accountability.
For Shein, the Hong Kong IPO represents both a financial opportunity and a test of whether its business model can withstand increasing scrutiny from regulators, investors and consumers.
If the offering proceeds as planned, the company’s Sept. 1 debut will mark the culmination of years of efforts to enter the public markets and provide investors with a new way to participate in one of the world’s fastest-growing online fashion businesses.
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